The Governor of Lagos State, Akinwunmi Ambode has a clear strategic imperative to meet the socio-economic challenges associated with a mega metropolis such as Lagos State. A strategic imperative, a clear pathway is essential to determine the future direction of the machinery of government and its overall effectiveness.
This is why we must examine how well or otherwise the hardworking governor has been implanting its imprint on the affairs of Lagos State from inception. This is important for, with a Gross Domestic Product (GDP) bigger than many African countries Kenya included, Ambode has his work cut out. The state bears all the turbulence of a mega-metropolis including those relating to environmental issues; it also has a population issue with the demography growing in geometrical proportions, inducing a high ratio of youth unemployment.
With a debt burden of about N500 billion, Lagosians are extremely lucky to have an accomplished chartered accountant at the helm of affairs in Lagos. It is no fluke or a mere coincidence that Lagos is not among the states seeking a bailout from the Federal Government. Ambode surely knows his onions.
Very sensibly, Ambode’s economic thrust in response to the landmines is to attract and retain capital in hitherto unprecedented proportions. In order to turn a potential crisis from danger into opportunity, creating the atmosphere to exploit an opportunity means that Lagos has to be repositioned in the minds of investors. Lagos, in his words is the “future citadel of entrepreneurship in this country. The state has a population of 21.9 million, of which four million are actually middle class. Lagos is the fifth largest economy in Africa and our GDP has hit $131 billion” – more than the GDP’s of 42 African countries put together.
Within this context, Ambode will leverage on the prospects of a young demographic base and an aspirational middle class estimated at about four million and growing to attract foreign investment. Both the youth as well as the actual and potential middle class have become the key indices in the attraction of foreign investments in Africa. In this way, Lagos will be the ‘new frontier’.
This is all very sensible. However, good intentions have to be backed up with a clear roadmap in other to walk the talk. The need to do this has induced the creation of an office of Overseas Affairs and Investment, also known as the Lagos Global initiative. A product of Ambode’s strategic thrust, the new office is now positioned as a beacon for global brands, indicating that a new market with varying degrees of opportunities has emerged on the west coast of Africa.
Endearingly, Ambode’s strategy echoes what a proper federating unit should do within the context of achieving sustainable development in a federation. Let us recall that in the First Republic, the three regional governments had established offices in London to coordinate their exports as well as marshal their investment drive. Modernizing this position, it is clear that Ambode is promoting what we may label as a “Ready for business Lagos State” model. A Lagos perceived as an easy and friendly place to do business in and with, is crucial in winning the globally competitive race for investments.
The new office is already making its mark as a one-stop shop which is what Ambode has in mind. The imperative here is the managerial co-ordination in a transparent manner (Ambode continuously places an emphasis on transparency and so do the potential and actual investors) providing a safe and secured environment against all the roadblocks, landmines and regulatory snags that might constitute both an impediment and a source of friction for the potential investor. In the words of Ambode – “For any company that wants to do business in Nigeria, Lagos is your best bet.”
The one-stop shop, business friendly Lagos strategy has started to bear fruits. The new magnet for example has already attracted and received kudos from the diplomatic circles. If the embassies have nodded their approval, the real McCoy has been the expression of interest by the private sector, as in, “the taste of the pudding is in the eating.” Here, a lot of big-hitters operating in alignment with Ambode’s jobs-creation thrust have also trooped in ready for business mode. You can’t get them hitting bigger than Wal-Mart for example.
The President of Wal-Mart Stores Inc., Ms. Shelley Broader personally led a delegation unveiling the group’s strategic plan to expand its business in Nigeria using Lagos State as its launching pad. Those excited about the new investment coordination induced by Ambode include the Smart City Group who came in with a big investment plan, as well as the Knauf Group International, Germany’s leading manufacturing group which came with the insignia of the German government.
Although his policy thrust has led to a breakthrough into increasing the flow of direct foreign investments (FDI’s), the governor is critically concerned about the areas investors are injecting capital into. The governor clearly has his own areas of priority, especially and crucially in meeting the state’s food security requirements which in his opinion is crucial to attaining the goal of self-sufficiency.
To tie his economic thrust together, there are clear strategic imperatives to be undertaken. In the first place, there has to be a re-ordering of budget priorities foregoing hand-in-glove with the quest for investments. There must be new initiatives on infrastructure and a brutal pairing down of recurrent expenditure which in Nigeria translates to duplication, waste and inefficiency.
This imperative came clear a week ago when the governor persuaded the Lagos State House of Assembly as to the need to re-order the year 2015 budget of the state government. The house approved N19,743,164,323 capital expenditure and N5,697,089,009 for recurrent expenditure bringing the total approved sum to N25, 440, 253, 332.
Re-ordering the budget priorities means that the central thrust of Ambode’s economic strategy will be to invest in the infrastructural base of the state as part of the Lagos business friendly strategy. Businesses certainly need this to be attracted in the first place and to prosper. It is also critical to note that the infrastructural prioritization being undertaken by Ambode will cater for such critical business enhancing inputs such as the continuation of the construction of the blue light rail project, continuation of the construction of the Lekki-Epe Expressway and the acquisition of heavy duty equipment (Cranes and Forklifts) and for the employment trust fund and wealth creation programmes.
Investment in infrastructure is incontrovertible to trigger off a multiplier effect on economic activities and investments and it is therefore clear that future Ambode budgets will be focused on placing infrastructure at the heart of sustainable economic development.
In this light, the need to attract sustainable development also has to be accompanied by governmental initiatives, ensuring security and in the medium to long term, reconstruction of social safety nets. This is because a metropolis operates its socio-economic activities on the basis of twenty-four hour cycles round the clock.
In a twenty-four hour economy, socio-economic activities do not grind to a halt at night. Major research from across the world recently has indicated that many cities over the past two decades have deliberately put in place measures to run a twenty-four hour economy. This makes sense, because the hospitality and entertainment industries, (so vital to the economy of a metropolis including that of Lagos) in particular, thrive better in a 24/7 economy.
Entertainment spots such as restaurants, pubs, nightclubs, cinemas, casinos, concert halls, theatres and licensed clubs make more business in this respect. And of course high flying business executives having worked hard during the day have to unwind at night.
In the next ten years it is expected that the state’s economy will be transformed away from the focus on younger people and entertainment. It is hoped that forty percent of the people taking advantage of the 24/7 economy will be aged over 40 and that 40% of operating businesses at this time will be chiefly anchored on formal businesses.
Undoubtedly, Ambode’s ongoing efforts at transforming the state’s economy would, in a significant manner, accelerate the scale of socio-economic development, enhance productivity and usher in prosperity for all in the state. The clear economic thrust of macro-economic stability investment in both the social and fiscal infrastructure is obviously the way to achieve social and economic justice as well as the pathway to the sustainable development of what has already become one of the world’s major mega metropolises.
- Badmus, an economist wrote in from Lagos